Monday, March 14, 2011

With the frantic headlines and devastating imagery over the weekend of the Japanese earthquake and tsunami, what are the implications to your portfolio of tech stocks and Chinese stocks?

I believe we are nearing the end of the uncertainty weighing on the markets over the current nuclear concerns. If we were focused on rebuilding, the markets would be having an easier time moving forward. As it is, we are still not sure of the situation with the nuclear reactors. Every time the word "nuclear meltdown" is used in describing the event unfolding, the market jitters.

But this is not the '80s in Chernobyl. This is modern-day Japan. The fears are outpacing the reality of the situation. By the end of the week, I suspect our fears will have subsided and our full attention will be focused on the improving American economy, not Japan.

I listened in on a conference call of BAML Capital Partners' top Japan and Asian analysts last night. One of their key messages was that the Japan crisis would have little if any impact on the rest of Asia. Yes, China exports a lot to Japan, and the Japanese consumer is going to be in hunker-down mode for a while. Yet this headwind will likely be more than offset by Japan's need for stuff in order to rebuild.

NetEase.com(NTES-commentary-Trade Now) was down on Friday but has had a strong couple of weeks since its earnings came out.

Why have these Chinese Web and gaming companies been doing so well, even after the massive earthquake hit at midnight last Thursday night? Despite the jitters about energy in North Africa in the last month, most investors are seeing the strength in all these names with rising advertising revenues and increased game usage from a confident Chinese consumer. Those local factors will trump tragic events next door in Japan.

These companies will continue to see their stock prices rise and fall solely on their own performance and the continued strength of the Chinese economy.

With the frantic headlines and devastating imagery over the weekend of the Japanese earthquake and tsunami, what are the implications to your portfolio of tech stocks and Chinese stocks?

I believe we are nearing the end of the uncertainty weighing on the markets over the current nuclear concerns. If we were focused on rebuilding, the markets would be having an easier time moving forward. As it is, we are still not sure of the situation with the nuclear reactors. Every time the word "nuclear meltdown" is used in describing the event unfolding, the market jitters.

But this is not the '80s in Chernobyl. This is modern-day Japan. The fears are outpacing the reality of the situation. By the end of the week, I suspect our fears will have subsided and our full attention will be focused on the improving American economy, not Japan.

I listened in on a conference call of BAML Capital Partners' top Japan and Asian analysts last night. One of their key messages was that the Japan crisis would have little if any impact on the rest of Asia. Yes, China exports a lot to Japan, and the Japanese consumer is going to be in hunker-down mode for a while. Yet this headwind will likely be more than offset by Japan's need for stuff in order to rebuild.

NetEase.com(NTES-commentary-Trade Now) was down on Friday but has had a strong couple of weeks since its earnings came out.

Why have these Chinese Web and gaming companies been doing so well, even after the massive earthquake hit at midnight last Thursday night? Despite the jitters about energy in North Africa in the last month, most investors are seeing the strength in all these names with rising advertising revenues and increased game usage from a confident Chinese consumer. Those local factors will trump tragic events next door in Japan.

These companies will continue to see their stock prices rise and fall solely on their own performance and the continued strength of the Chinese economy.

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